SMRT: 2QFYMar11 results. Revenue + 7.2% yoy, +1.8% qoq at $246m, underpinned by growth in train and bus ridership and higher rental and advertising revenue. But net profit -13% yoy, flat qoq, at $45.8m, driven by higher operating costs as the Jobs Credit scheme ended, and -1% in avg fares due to switch to the distance-based fare system…
Mgt guided for further rise in staff costs in 2H11, with headcount expected to increase by 5% to 6,700-6,800, as well as higher fuel costs as energy costs due to rising prices and increase in train runs. Growth of ridership for Circle Line (CCL) Stages 1-3 was below management's expectations coming in at 154k vs 200k breakeven target. Co declares interim div of 1.75cts/sh, unchg from last yr…
Deutsche, Citi, UOBK maintain Sell with targets btwn $1.90-1.95. Street view is that SMRT will continue to be weighed by higher operating costs (staff costs, unhedged fuel) and start up losses from CCL. Valuation at 20x PE is unattractive, vs low 3-yr CAGR of ~3%. UOBK recommends entry at $1.70.
Monday, November 1, 2010
Capitaland
Capitaland: Profits for 3Q were down 43.3% at 159.6m compared to 3Q09, which was largely due to revenue falling 34.6% at 684.6m. DB maintains Buy raising TP to $4.90 from $4.84 pegged at parity to RNAV. Excluding $74m in divestment gains from Starhub Ctr and Sichuan Zhixin, core earnings of $85m were still above expectations...
Decrease in revenue was due to divestment of Clarke Quay and 3 malls in Msia and lower revenue recognition in Sg and China. Valuations now undemanding at RNAV now trading at 21% discount. NAV now at $3.17…
Has plans to allocate $300-500m to a new business unit CapitaValue Homes to develop affordable housing in China and Vietnam. 2 sites have been identified, one in Wuhan, China approx 90sqm, S$970-S$1,358per sqm and the second in Ho Chi Minh, Vietnam, a 70% stake of the S$40m project…
US investor group New Cotai is suing its JV partner East Asia Satellite Television (East Asia) to force East Asia to transfer the 60% interest it has in Macau Studio City at a price determined by the courts. East Asia is made up of Capitaland and e-Sun. Capland invested $132m for a 20% stake in the project and has a put option which would allow it to exit its partnership with e-Sun without significant losses after it comes into effect.
Decrease in revenue was due to divestment of Clarke Quay and 3 malls in Msia and lower revenue recognition in Sg and China. Valuations now undemanding at RNAV now trading at 21% discount. NAV now at $3.17…
Has plans to allocate $300-500m to a new business unit CapitaValue Homes to develop affordable housing in China and Vietnam. 2 sites have been identified, one in Wuhan, China approx 90sqm, S$970-S$1,358per sqm and the second in Ho Chi Minh, Vietnam, a 70% stake of the S$40m project…
US investor group New Cotai is suing its JV partner East Asia Satellite Television (East Asia) to force East Asia to transfer the 60% interest it has in Macau Studio City at a price determined by the courts. East Asia is made up of Capitaland and e-Sun. Capland invested $132m for a 20% stake in the project and has a put option which would allow it to exit its partnership with e-Sun without significant losses after it comes into effect.
Eratat Lifestyle
Eratat Lifestyle: Reported strong set of 2Q earnings, with Rev at Rmb275.1m, up 20.3%YoY and 9.6%QoQ, while Net Income at Rmb44.1m was up 108%YoY and 53.8%QoQ, with overall gross margin improving by 3%...
Sterling results attributed to increase in sales contribution by higher margin apparel and increase in ASP, following grp’s successful brand repositioning. Going forward, grp remains upbeat abt FY10 performance, and aims to enhance its distribution network and streghten retail locations, backed by a strong orderbook, received for the 2010 Autumn/Winter Season and 2011 Spring/Summer Season….
Result brings 1H10 EPS to 3.4c, vs FY09 of 4.8c, translating to a compelling annualized P/E of 2.7x vs its larger peers, China Sports 4.13x FY10E P/E and China HongXing 18.44x FY10E P/E.
Sterling results attributed to increase in sales contribution by higher margin apparel and increase in ASP, following grp’s successful brand repositioning. Going forward, grp remains upbeat abt FY10 performance, and aims to enhance its distribution network and streghten retail locations, backed by a strong orderbook, received for the 2010 Autumn/Winter Season and 2011 Spring/Summer Season….
Result brings 1H10 EPS to 3.4c, vs FY09 of 4.8c, translating to a compelling annualized P/E of 2.7x vs its larger peers, China Sports 4.13x FY10E P/E and China HongXing 18.44x FY10E P/E.
Venture Corporation
Venture Corporation: Reported 3Q results in line with estimates, with market already factoring lower YoY rev as grp pares down its printing & imaging business. Rev at $677.9m was down 26.9%YoY but up 7.3% QoQ, while Net Income at $48.6m was up 27.7%YoY and 6.6%QoQ, as net margins improve to 7.8% vs 4.1%YoY, with grp shifting strategic focus to the higher margin business of ODM and solutions Enterprise...
Result places 9m10 Net Income at $133.9m, up 5.5%YoY. Going forwards, grp maintains positive outlook and expects sequential revenue growth to continue into 4Q, with strong focus on innovation and technological competencies...
We note that grp’s balance sheet remains healthy with a net-cash position of $237.1m, which could be used to fund R&D or strategic acquisitions. With latest results, grp trades at an annualized EPS of 65.1c up 33.4%YoY and at Forward FY10 P/E of 13.9x, in line with Peers average. CIMB has Buy call with $11.98 TP rolling over estimates to 14x FY11 P/E.
Result places 9m10 Net Income at $133.9m, up 5.5%YoY. Going forwards, grp maintains positive outlook and expects sequential revenue growth to continue into 4Q, with strong focus on innovation and technological competencies...
We note that grp’s balance sheet remains healthy with a net-cash position of $237.1m, which could be used to fund R&D or strategic acquisitions. With latest results, grp trades at an annualized EPS of 65.1c up 33.4%YoY and at Forward FY10 P/E of 13.9x, in line with Peers average. CIMB has Buy call with $11.98 TP rolling over estimates to 14x FY11 P/E.
Raffles Medical
#Raffles Medical: may see spillover interest, as the closest peer to Thomson. Although Raffles is > double the size of Thomson in terms of revenue, net profit, it trades at trailing PE of just 27x. This compares with Thomson’s 31.4x PE (at $1.75/sh), and Parkway’s 36.5x PE (at takeover price of $3.85/sh). If Raffles valuations were to catch up with Thomson, that would imply at share price of $2.54, vs $2.18 at last close…
Technically, Raffles’ chart is beautiful. The stock is in a longer term uptrend, and appears to have just completed a consolidation phase over the past month. Stochastics is just coming out of oversold levels, suggesting the upward climb may resume again…
Raffles’ 3Q results last wk were in line, but a couple of houses have cited concerns about valuations. The Thomson GO could be a catalyst for analysts to revise their valuations upwards, with Raffles having a scarcity premium now that is the only remaining quality hospital listing in Spore. It remains a potential acquisition target, for the likes of Fortis, which is looking for a foothold in the region.
Technically, Raffles’ chart is beautiful. The stock is in a longer term uptrend, and appears to have just completed a consolidation phase over the past month. Stochastics is just coming out of oversold levels, suggesting the upward climb may resume again…
Raffles’ 3Q results last wk were in line, but a couple of houses have cited concerns about valuations. The Thomson GO could be a catalyst for analysts to revise their valuations upwards, with Raffles having a scarcity premium now that is the only remaining quality hospital listing in Spore. It remains a potential acquisition target, for the likes of Fortis, which is looking for a foothold in the region.
Thomson Medical
Thomson Medical: halt to be lifted at 9am.
Peter Lim, via pte invmt vehicle Sasteria, acquires 39.3% stake from founder, Dr Cheng Wei Chen; triggers mandatory offer for remaining shares. Offer price at $1.75/sh is at 62% premium over last traded at $1.08, values the obstetrics and gynae svc provider at $513m. Cash offer is conditional on Peter Lim acquiring >50% stake…
Peter Lim, which owns ~30% interest in Msia’s TMC Life Sciences, a healthcare svc provider specializing in fertility treatment, stem cell banking and stem cell therapy, notes the potential to develop Thomson further as a regional healthcare company. Says prospects to be underpinned by the growing population and affluence in the region, increasing demand for private healthcare services.
Peter Lim, via pte invmt vehicle Sasteria, acquires 39.3% stake from founder, Dr Cheng Wei Chen; triggers mandatory offer for remaining shares. Offer price at $1.75/sh is at 62% premium over last traded at $1.08, values the obstetrics and gynae svc provider at $513m. Cash offer is conditional on Peter Lim acquiring >50% stake…
Peter Lim, which owns ~30% interest in Msia’s TMC Life Sciences, a healthcare svc provider specializing in fertility treatment, stem cell banking and stem cell therapy, notes the potential to develop Thomson further as a regional healthcare company. Says prospects to be underpinned by the growing population and affluence in the region, increasing demand for private healthcare services.
SG Market
SG Market: STI likely to open slightly lower as investors book some profits ahead of key events in US this week. Wall Street's flat session last Fri & mixed regional bourses also likely to inspire caution with all eyes are on the Fed, US mid-term elections & Fri's non-farm payrolls report. Market is expected to stay quiet as today will be a day of anticipation.
Support for STI seen at 3,085 with upside capped at 3,200. Thomson Medical Centre will be in focus after Peter Lim's surprise offer at $1.75 or 68% may also trigger re-rating interest in Raffles Medical. OCBC 3Q earnings due at lunch break keenly watched for slide in its net interest margins, fee & non-interest income gains.
Support for STI seen at 3,085 with upside capped at 3,200. Thomson Medical Centre will be in focus after Peter Lim's surprise offer at $1.75 or 68% may also trigger re-rating interest in Raffles Medical. OCBC 3Q earnings due at lunch break keenly watched for slide in its net interest margins, fee & non-interest income gains.
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